Cryptocurrencies are under pressure thanks to the U.S. SEC denial of nine Bitcoin ETFs.
It rejected two ETFs by ProShares that would track Bitcoin future contracts. It denied five inversed and leveraged ETFs from Direxion. And it denied one from GraniteShares.
The news comes as no surprise
The US SEC cited failure to prevent manipulation and fraud as a reason for denial. It also noted that failure to prove Bitcoin markets are “markets of significant size” as another reason.
This is similar to the reasoning behind denying the Winklevoss ETF, too.
“…the Commission is disapproving this proposed rule change because, as discussed below, the Exchange has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices. Among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are ‘markets of significant size.’”
Also, the SEC has not been offered any evidence to prove the size of the Bitcoin futures market.
“Surveillance-sharing with a regulated market of significant size related to bitcoin is necessary to satisfy the statutory requirement that the Exchange’s rules be designed to prevent fraudulent and manipulative acts and practices,” they noted.
Sell Off is Another Overreaction
At the moment, markets are only falling because of ETF disapproval.
They’ll likely fall again when the U.S. SEC will predictably delay on September 30, as well. However, what we have to consider is that eventually the agency will approve an ETF.
“We do think that a product is coming soon,” Ali Hassan, CEO of Crescent Crypto told CNBC, as quoted by CCN. “Perhaps, in the next 18 months, we’ll see a Bitcoin-only ETF.”
Analysts continue to hold a Bullish Outlook
While the latest move was aggravating, some analysts are still bullish.
In fact, some note that the VanEck and SolidX ETF proposal still has a fighting chance of approval. Others drew attention to the highly-anticipated arrival of the ICE-backed Bakkt platform, which some say will be much more influential than a Bitcoin ETF.
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